Number of Operating banks in Ghana reduced from 34 to 23

Ghana’s financial space will now have only 23 banks, down from the 34 that were operating in the country as of January 2017. This follows a cleanup of the sector by the Bank of Ghana (BoG).

Many of the banks that previously operated in the country have folded up and been taken over by other banks due to various new regulations introduced by the Central Bank including the GHS400million minimum capital requirement.

In August 2017, the BoG gave GCB Bank the green light to acquire two local banks – UT and Capital bank – due to severe impairment of their capital.

In August 2018, the BoG consolidated five other local banks into what it calls the Consolidated Bank Ghana. The banks were Beige Bank, Construction bank, Royal bank, uniBank and Sovereign bank. Beyond having liquidity challenges, some of them were engaged in activities that the BoG considered criminal.

The Bank of Ghana in a statement on January 4, 2019 following the expiration of the minimum capital requirement deadline, said all the 23 remaining banks have met the new minimum paid-up capital of GHC400 million. Sixteen banks have met the new minimum paid-up capital requirement mainly through capitalisation of income surplus and a fresh capital injection.

The BoG has approved three applications for mergers. Consequently, First Atlantic Merchant Bank and Energy Commercial Bank have merged as well as Omni Bank and Bank Sahel Sahara have merged, First National Bank and GHL Bank have done thesame. The three resulting banks out of these mergers have all met the new minimum capital requirement.

Some private pension funds in Ghana have injected fresh equity capital in five indigenous banks through a special purpose holding company named Ghana Amalgamated Trust (GAT). In addition to the state-owned banks (ADB, NIB) benefiting from the GAT scheme, the other beneficiary banks (the merged Omni/Bank Sahel Sahara, Universal Merchant Bank and Prudential Bank) were selected by GAT on the basis of their solvent status and good corporate governance, the statement said.

The Bank of Ghana further explained that it had revoked the licenses of Premium Bank and Heritage Bank and approved their takeover by Consolidated Bank Ghana. It said in the case of Heritage Bank that the institution had questionable capital sources.

Meanwhile GN Bank has been downgraded into a savings and loans company following its inability to meet the minimum capital requirement.

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